Mitsubishi Chemical, Rayon to Reunite

Goal of the merger is to make corporate activity more international in face of increasing competition

Japan's Mitsubishi Chemical Holdings said on Nov. 19 it would buy Mitsubishi Rayon, reuniting them for the first time in six decades, in a deal that could be worth $2.5 billion.

Mitsubishi Chemical, Japan's top chemicals maker, said it had reached a basic agreement with Mitsubishi Rayon that it would launch a tender offer for all outstanding shares in the rayon company in early February.

"It is inevitable in order to make corporate activity more international and larger as global competition intensifies" with the emergence of Chinese and Middle Eastern companies, the two firms said.

It will be the first time for the companies to merge since they were split under the U.S. occupation following Japan's defeat in World War II.

If combined with revenues at Mitsubishi Rayon, sales of Mitsubishi Chemical, already one of the world's largest chemicals maker, would come to 3.25 trillion yen in the year that ended in March 2009.

Copyright Agence France-Presse, 2009

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